istock-tax-blog-cliffBy:  Amanda Wilson

As I discussed in a prior blog post (found here), if you have more than $10,000 in a foreign bank account, you are obligated to file Form 114 (commonly known as an FBAR).   Failure to make this filing can result in significant civil penalties, and can also result in some cases in jail time.

If you did not realize that you were supposed to file an FBAR and therefore failed to do so, do not panic.  The IRS has programs in place to help bring you in compliance, including the Offshore Voluntary Disclosure Program.  A qualified tax advisor can help you evaluate your options and decide which approach is best for you.

It is important to be proactive, though, and address the situation before the IRS finds you.  If the IRS finds you first, your options are much more limited.